If you don’t like stocks, why own any of them? Sure, you would be ahead if you had switched from Crox to Merck last fall, but Merck has still been cut in half in the last 12 months. Even Wal-Mart, Costco, Monsanto, Toyota and Honda have been among my better shorts this fall. In a bear market, earnings and multiples contract for all companies, not just the high fliers.

JP Morgan just came out with a list of 16 stocks to hold in a two-year “global recession,” which seems to be the new euphemism for depression. From Bloomberg:

The list merges the strongest convictions of its 78 stock analysts with a “top-down” view that the banking crisis threatens global growth, Thomas J. Lee, chief U.S. equity strategist at the New York-based bank, said in a telephone interview.

“There is growing demand from clients for core holdings that outperform in a global recession,” Lee said. “Every week that passes that credit markets remain challenged, there’s incremental damage to the macro economy.”

The companies are:

3M Co.
Baxter International Inc.
Colgate-Palmolive Co.
CA Inc.
Devon Energy Corp.
General Mills Inc.
Gilead Sciences Inc.
Google Inc.
Hewlett-Packard Co.
McDonald's Corp.
Merck & Co.
Monsanto Co.
Nucor Corp.
Philip Morris International Inc.
Union Pacific Corp.
Visa Inc

I have created a Yahoo! Finance portfolio of these companies, and I am going to track their performance over the coming months and years. I give them extremely low odds of outperforming a 2-year Treasury bond, and about even odds of beating the Dow. To be more specific, I bet they fall by an average of 50% over the next 24 months, even from today’s prices, which are about 25% lower than 2 months ago.

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Disclosure: I happen to be long Union Pacific puts, and I recently sold my Nucor and Monsanto puts.